Forget Your MBA: Managing a Living Company

Welcome Big Design 2011 attendees! I had a great time presenting to all of you, thanks for coming out to my talk. Below is a linked list of many of the articles cited during my presentation and some of the major points I hit on. You can view the slides on Slideshare. I recently gave a similar talk and did a longer write up here

I always love to hear what you thought about the presentation. You can find me on Twitter, @marcelosomers or shoot me an email.

If you’re interested, you can also subscribe to the RSS feed or follow @behindcompanies for updates on Twitter.

Business Is a Design Problem

  • Business and Design go hand in hand
  • The goal of a designer is to build a product that people love to use
  • This is how to build a company that supports building products people love to use. It’s how to build a successful and long-lasting company.

The Living Company

  • Royal Dutch Shell Study: THE LIVING COMPANY: Habits for survival in a turbulent business environment
  • The average lifespan of a multinational company is 40-50 years. ()
  • 1/3 of the companies on the 1970 Fortune 500 had vanished by 1983
  • Why is this? “Companies die because their managers focus on the economic activity of producing goods and services, and they forget that their organizations’ true nature is that of a community of humans.”

Making Money Is Not Your Goal

  • Peter Drucker – Management: Tasks, Responsibilities, Practices: “Profit is the result of doing things right rather than the purpose of business activity. Profitability is a measurement of how well the business discharges its functions in serving the market and customer.”
  • Profitability really is the scorecard for measuring how well a company serves its customer, not the means to the end of a successful business.

Starbucks: Undisciplined Pursuit of More

  • Howard Schultz, Starbucks CEO on their undisciplined growth
  • “When you look at growth as a strategy, it becomes somewhat seductive, addictive. But growth should not be—and is not—a strategy; it’s a tactic.”
  • “The primary lesson I’ve [Howard Schultz] learned over the years is that growth and success can cover up a lot of mistakes. As we return the company to growth, it’ll be disciplined, profitable growth for the right reasons.”

Packard’s Law

  • (Jim Collins – How the Mighty Fall): No company can consistently grow revenues faster than its ability to get enough of the right people to implement that growth and still become a great company.
  • It had taken HP 50 years to get to $15 billion in sales. Under Lou Platt it took only 4 years to get to $30 billion and only 3 additional years to get to $45 billion. Unable to sustain this exceptional growth, HP hit a wall in 1998 and disappointed Wall Street for 5 quarters.

Chipotle: Disciplined Growth & Focus

  • Steve Ellis, CEO of Chipotle on his product focus)
  • “Focus on just a few things, and do them better than anybody else.”

The Product (or service!) Is The Constraint

  • Horace Dediu on Asymco: “At Apple the top priority is the product. Sounds trivial, but very few companies place product first. Those who do tend to be producing creative works. Most companies place either production or distribution first.”
  • Kyle Baxter ( “‘Because we can’ isn’t a reason for doing something.”

Ideas Are Cheap, Real Artists Ship

  • The Social Network
  • Kellan Elliot-McCrea, one of the original Flickr architects on Quora about why Flickr missed the mobile photo opportunity: “We fell into the trap of thinking like an incumbent.”
  • William Wilkinson @willw: “The best PR/marketing tip: make something worth writing about.”

The Role of a Manager

Don’t Hire for Experience

Slaughter Your Golden Gooses

July 15, 2011